Lacy-McKinney v. Taylor Bean & Whitaker Mortgage Corp.

Florence R. Lacy-McKinney (plaintiff) financed the purchase of a home with a mortgage that was insured by the Federal Housing Authority, an office within the United States Department of Housing and Urban Development (HUD). The mortgage was eventually transferred to Taylor, Bean & Whitaker Mortgage Corp. (Taylor) (defendant). Lacy-McKinney fell behind on her mortgage payments, and Taylor brought a mortgage-foreclosure action against Lacy-McKinney. Prior to initiating the action, Taylor did not attempt to schedule a face-to-face meeting with Lacy-McKinney to discuss her missed payments or attempt to arrange a payment plan. Taylor moved for summary judgment on its foreclosure action, and Lacy-McKinney raised affirmative defenses to the foreclosure. Lacy-McKinney argued that Taylor had failed to comply with HUD regulations regarding foreclosure actions on HUD-insured mortgages. HUD regulations specifically required mortgagees to have or attempt to schedule a face-to-face meeting with borrowers who had fallen behind on payments to discuss repayment plans or other loss-mitigation procedures prior to initiating a foreclosure action. HUD regulations also required mortgagees to accept partial mortgage payments. Taylor argued that it did not have to schedule a face-to-face meeting with Lacy-McKinney because it did not have an office within 200 miles of her home, and that she did not attempt to make partial payments—both facts that Lacy-McKinney disputed. The trial court granted summary judgment for Taylor. Lacy-McKinney appealed.